MSFT Microsoft Corporation

By Natalia Drozdiak 

BRUSSELS -- In their review of Microsoft Corp.'s $26 billion acquisition of LinkedIn Corp., European Union antitrust regulators are attempting to measure the rough value of the professional network's data and whether rival sites can replicate it, according to a person familiar with the matter.

The European Commission, the bloc's antitrust authority, has sent out questionnaires to competitors as part of its standard merger review process after the companies formally registered the deal with the EU last week, people familiar with the matter said.

The commission has previously said it would scrutinize mergers involving large amounts of data more closely, and may start reviewing deals involving smaller companies, especially in cases when a firm snaps up another just to get hold of its data.

In a speech earlier this year, EU competition chief Margrethe Vestager explained the commission wouldn't take action against a company just because it has a lot of data, but would first question whether rivals can also get that same data elsewhere. That question is one of the main issues at the heart of the EU's review of the Microsoft-LinkedIn deal.

At issue is whether owning certain types of data in vast quantities could impede rivals from competing. Large data sets like LinkedIn's are potentially valuable because firms can sell that information to advertising services and because they are also critical to the development of artificial intelligence, a technology that Microsoft has said it was counting on to drive growth.

In the questionnaire, the EU asks how difficult it is for competitors to challenge LinkedIn and whether the data used on the network can or cannot be replicated, according to one of the people familiar with the matter. The questionnaire also asks about artificial intelligence and the extent to which it's becoming important, especially for cloud services.

Salesforce.com Inc., which sells web-based business software and lost to Microsoft in its bid for LinkedIn, has publicly pressed regulators to closely scrutinize the deal. The company's executives have expressed concern about whether rivals will have access to the LinkedIn data after the merger. However, no outside entity currently has unlimited access to LinkedIn's data trove, people familiar with the matter have said.

In a blog posted in early October, Salesforce's Chief Legal Officer Burke Norton said the merger would stifle innovation by restricting access to what he described as unique data.

"No other data set available anywhere in the world today has anything remotely approaching the scale, scope, quality and accuracy of LinkedIn's business data," Mr. Norton said. " Facebook, Twitter, Google and others don't have this kind of data."

The data from 450 million LinkedIn profiles is useful not just for the CVs uploaded by users, but for information about people's various connections, their interests and what types of profiles employers look for.

Microsoft, however, is arguing that much of the user data on LinkedIn is also found on other social-networking sites, including Facebook Inc., which should therefore also be considered as part of the same market in the EU's review process, according to a person familiar with the matter.

Because Facebook collects vast amounts of data, such an argument would make LinkedIn's data pool appear less valuable and comparatively smaller.

In the questionnaire to rivals, the EU asks about the differences between professional social-media networks and personal social-media networks.

The EU has set an initial deadline for its review for Nov. 22, but that can be extended, especially if the regulator has concerns about the deal. Microsoft aims to close the transaction by the end of the year.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

(END) Dow Jones Newswires

October 22, 2016 10:00 ET (14:00 GMT)

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